The stock price of Trump Media & Technology Group (TMTG), the parent company of the social media platform Truth Social, founded by former U.S. President Donald Trump, has seen a substantial rise for two consecutive days following its debut on the New York Stock Exchange.
According to the Wall Street Journal, on the 27th, TMTG’s stock price closed at $66.22, a 14.19% increase. This follows a 16.1% rise on its first day of trading after changing its ticker symbol to DJT, about Trump’s initials, marking a double-digit increase for two days.
The value of TMTG soared even before its official debut because Digital World Acquisition Corp (DWAC), the special purpose acquisition company (SPAC) that acquired TMTG, had been traded on the New York Stock Exchange before the merger.
A SPAC is a special-purpose company created to merge with or acquire private companies. This allows companies like Trump Media to directly list themselves on the stock market, bypassing the complex process of going public.
On the 22nd, DWAC held a shareholder meeting where the merger with TMTG was approved, and the legal procedures related to the merger were completed on the 25th.
Trump, who owns 58% of the company’s shares (78.75 million shares), is the largest shareholder. With the stock price soaring for two consecutive days, Trump’s assets, who was once a real estate tycoon, have also rapidly increased.
If the stock price stays, the value of the TMTG shares he owns exceeds $5.2 billion. This would put his total wealth at about $7.9 billion, surpassing the likes of Netflix co-founder Reed Hastings (approximately $6 billion) and fashion mogul Miuccia Prada (approximately $7.4 billion) based on the Bloomberg Index.
However, considering that Trump Media, a startup, had only $3.4 million in revenue over the past nine months and suffered a net loss of $490 million, experts are warning that the stock price increase might be excessive.
Due to a mandatory holding agreement, Trump is prohibited from selling his shares for six months, making it difficult to cash out immediately. Some speculate that he may get special approval from the board of directors to sell his stake early.
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